Deposit outflows signal growing domestic financial strain as Russians anticipate potential state seizure to finance the war effort.
Russians have withdrawn 24.4 billion euros from the banking system this year, driven by fears the government may seize deposits to fund its war in Ukraine. The exodus tightens liquidity for banks already burdened by state-directed lending to defense industries, raising risks of a domestic funding squeeze.
The outflows coincide with widening budget deficits and collapsing bond issuance, underscoring the Kremlin’s struggle to manage financial strain. A senior state economist was dismissed after publicly questioning Russia’s ability to sustain war financing, adding to market concerns.
While the impact is largely domestic, traders monitoring sanctions and secondary risks may view the developments as a signal of escalating economic pressure on Moscow.